Annual Report 2012

Recommendations

Info

Financial Statements (International) NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) for the year ended 31 December 2012 41 ACCOUNTING ESTIMATES AND JUDGEMENTS (Continued) Impairment for long-lived assets If circumstances indicate that the net book value of a long-lived asset may not be recoverable, the asset may be considered “impaired”, and an impairment loss may be recognised in accordance with IAS 36 “Impairment of Assets”. The carrying amounts of long-lived assets are reviewed periodically in order to assess whether the recoverable amounts have declined below the carrying amounts. These assets are tested for impairment whenever events or changes in circumstances indicate that their recorded carrying amounts may not be recoverable. When such a decline has occurred, the carrying amount is reduced to recoverable amount. For goodwill, the recoverable amount is estimated annually. The recoverable amount is the greater of the net selling price and the value in use. It is difficult to precisely estimate selling price because quoted market prices for the Group’s assets or cash-generating units are not readily available. In determining the value in use, expected cash flows generated by the asset or the cash-generating unit are discounted to their present value, which requires significant judgement relating to level of sale volume, selling price and amount of operating costs. Management uses all readily available information in determining an amount that is a reasonable approximation of recoverable amount, including estimates based on reasonable and supportable assumptions and projections of sale volume, selling price and amount of operating costs. Depreciation Property, plant and equipment, other than oil and gas properties, are depreciated on a straight-line basis over the estimated useful lives of the assets, after taking into account the estimated residual value. Management reviews the estimated useful lives of the assets at least annually in order to determine the amount of depreciation expense to be recorded during any reporting period. The useful lives are based on the Group’s historical experience with similar assets and take into account anticipated technological changes. The depreciation expense for future periods is adjusted if there are significant changes from previous estimates. Impairment for bad and doubtful debts Management estimates impairment losses for bad and doubtful debts resulting from the inability of the Group’s customers to make the required payments. Management bases the estimates on the ageing of the accounts receivable balance, customer credit-worthiness, and historical write-off experience. If the financial condition of the customers were to deteriorate, actual write-offs would be higher than estimated. Allowance for diminution in value of inventories If the costs of inventories become higher than their net realisable values, an allowance for diminution in value of inventories is recognised. Net realisable value represents the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale. Management bases the estimates on all available information, including the current market prices of the finished goods and raw materials, and historical operating costs. If the actual selling prices were to be lower or the costs of completion were to be higher than estimated, the actual allowance for diminution in value of inventories could be higher than estimated. 42 POSSIBLE IMPACT OF AMENDMENTS, NEW STANDARDS AND INTERPRETATIONS ISSUED BUT NOT YET EFFECTIVE FOR THE ANNUAL ACCOUNTING PERIOD ENDING 31 DECEMBER 2012 Up to the date of issue of these financial statements, the IASB has issued a number of amendments, new standards and interpretations which are not yet effective for the annual accounting period ended 31 December 2012 and which have not been adopted in these financial statements. Management is in the process of making an assessment of what the impact of these amendments, new standards and new interpretations is expected to be in the period of initial application and has so far concluded that the adoption of these amendments, new standards and new interpretations is unlikely to have a significant impact on the Group’s results of operations and financial position. 43 POST BALANCE SHEET EVENT On 4 February 2013, the Company announced a schedule of placing new H shares to certain independent investors. Pursuant to the schedule and on 14 February 2013, the Company issued 2,845,234,000 H Shares with a par value of RMB 1.00 each at the placing price of HKD 8.45 per share to these independent investors, with the aggregate net proceeds of HKD 23,970 million. Pursuant to a resolution passed at the director’s meeting on 22 March 2013, the Company proposed to transfer share premium to share capital in the proportion of 1 for every 10 shares, subject to the shareholders’ approval at the Annual General Meeting. 44 PARENT AND ULTIMATE HOLDING COMPANY The directors consider the parent and ultimate holding company of the Group as at 31 December 2012 is Sinopec Group Company, a state-owned enterprise established in the PRC. This entity does not produce financial statements available for public use. 190 Annual Report 2012 CHINA PETROLEUM & CHEMICAL CORPORATION
(C) DIFFERENCES BETWEEN FINANCIAL STATEMENTS PREPARED IN ACCORDANCE WITH THE ACCOUNTING POLICIES COMPLYING WITH ASBE AND IFRS (UNAUDITED) Other than the differences in the classifications of certain financial statements captions and the accounting for the items described below, there are no material differences between the Group’s financial statements prepared in accordance with the accounting policies complying with ASBE and IFRS. The reconciliation presented below is included as supplemental information, is not required as part of the basic financial statements and does not include differences related to classification, display or disclosures. Such information has not been subject to independent audit or review. The major differences are: (i) Government Grants Under ASBE, grants from the government are credited to capital reserve if required by relevant governmental regulations. Under IFRS, government grants relating to the purchase of fixed assets are recognised as deferred income and are transferred to the income statement over the useful life of these assets. (ii) Safety Production Fund Under ASBE, safety production fund should be recognised in profit or loss with a corresponding change in reserve according to PRC regulations. Such reserve is reduced for expenses incurred for safety production purposes or, when safety production related fixed assets are purchased, is reduced by the purchased cost with a corresponding increase in the accumulated depreciation. Such fixed assets are not depreciated thereafter. Under IFRS, expense is recognised in profit or loss when incurred, and fixed assets are depreciated with applicable methods. Effects of major differences between the net profit under ASBE and the profit for the year under IFRS are analysed as follows: Note 2012 2011 RMB millions RMB millions Net profit under ASBE Adjustments: 66,411 76,864 Government grants (i) 112 97 Safety production fund (ii) 273 1,484 Profit for the year under IFRS* 66,796 78,445 Effects of major differences between the shareholders’ equity under ASBE and the total equity under IFRS are analysed as follows: Note 2012 2011 RMB millions RMB millions Shareholders’ equity under ASBE Adjustments: 550,601 509,525 Government grants (i) (1,723) (1,489) Safety production fund (ii) (842) (692) Total equity under IFRS* 548,036 507,344 * The above figures are extracted from the financial statements prepared in accordance with the accounting policies complying with IFRS which have been audited by KPMG. 191 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2012 Financial Statements (Differences Between the ASBE and IFRS)
Page 3 and 4:
CONTENTS 2 Company Profile 3 Princi
Page 5 and 6:
PRINCIPAL FINANCIAL DATA AND INDICA
Page 7 and 8:
2 FINANCIAL INFORMATION EXTRACTED F
Page 9 and 10:
(2) Information disclosed by the sh
Page 11:
Sinopec Corp.’s development accel
Page 14 and 15:
Business Review and Prospects BUSIN
Page 16 and 17:
Page 18 and 19:
Page 21 and 22:
MANAGEMENT’S DISCUSSION AND ANALY
Page 23 and 24:
The following table shows the opera
Page 25 and 26:
In 2012, refining margin was RMB 15
Page 27 and 28:
As at 31 December 2012, the Company
Page 29:
(2) Financial data prepared under A
Page 33 and 34:
(2) THE PROPOSED ISSUANCE OF A SHAR
Page 36 and 37:
Significant Events SIGNIFICANT EVEN
Page 39 and 40:
CONNECTED TRANSACTIONS 1 AGREEMENTS
Page 41:
Decision-making procedures: The maj
Page 44 and 45:
Corporate Governance CORPORATE GOVE
Page 46 and 47:
Page 48 and 49:
Page 51 and 52:
REPORT OF THE BOARD OF DIRECTORS Th
Page 53 and 54:
6 DIVIDEND During this report perio
Page 55 and 56:
16 RISK FACTORS In the course of it
Page 57 and 58:
Firstly, the Board of Directors dil
Page 59 and 60:
DIRECTORS, SUPERVISORS, SENIOR MANA
Page 61 and 62:
Li Chunguang Dai Houliang Liu Yun L
Page 63 and 64:
The Members of the Fourth Session o
Page 65 and 66:
Zou Huiping Zou Huiping, aged 52, S
Page 67 and 68:
The Members of the Fourth Session o
Page 69 and 70:
Lei Dianwu Ling Yiqun Lei Dianwu, a
Page 71 and 72:
THE BREAKDOWN ACCORDING TO THE MEMB
Page 73 and 74:
REPORT OF THE PRC AUDITOR All Share
Page 75 and 76:
BALANCE SHEET as at 31 December 201
Page 77 and 78:
INCOME STATEMENT for the year ended
Page 79 and 80:
CASH FLOW STATEMENT for the year en
Page 81 and 82:
STATEMENT OF CHANGES IN EQUITY for
Page 83 and 84:
NOTES TO THE FINANCIAL STATEMENTS (
Page 85 and 86:
Page 87 and 88:
Page 89 and 90:
Page 91 and 92:
Page 93 and 94:
Page 95 and 96:
Page 97 and 98:
Page 99 and 100:
Page 101 and 102:
Page 103 and 104:
Page 105 and 106:
Page 107 and 108:
Page 109 and 110:
Page 111 and 112:
Page 113 and 114:
Page 115 and 116:
Page 117 and 118:
Page 119 and 120:
Page 121 and 122:
Page 123 and 124:
Page 125 and 126:
Page 127 and 128:
Page 129 and 130:
Page 131 and 132:
Page 133 and 134:
Page 135 and 136:
Page 137 and 138:
(B) FINANCIAL STATEMENTS PREPARED U
Page 139 and 140:
CONSOLIDATED BALANCE SHEET as at 31
Page 141 and 142: CONSOLIDATED STATEMENT OF CHANGES I
Page 143 and 144: CONSOLIDATED STATEMENT OF CASH FLOW
Page 145 and 146: NOTES TO THE FINANCIAL STATEMENTS f
Page 147 and 148: NOTES TO THE FINANCIAL STATEMENTS (
Page 175 and 176: NOTES TO THE FINANCIAL STATEMENTS f
Page 191: NOTES TO THE FINANCIAL STATEMENTS (
Page 195 and 196: (D) SUPPLEMENTAL INFORMATION ON OIL
Page 198 and 199: Corporate Information CORPORATE INF
Page 200: Confirmation from fhe Directors and
show all

Annual Report 2012

Create successful ePaper yourself

Delete template?

Save as template?